Research On The Anomalies In Real Estate Estate Market Based On Behavioral Finance Theory

Since the currency reform of housing in 1998, the rapid development of China's real estate market has given important contributions to stimulating domestic demand, driving economic growth, keeping quick, healthy and sustainable development in our national economy. However, in the process of the development of the real estate market, a number of abnormal phenomenon which can not be explained by traditional financial theory appear. These phenomenon constitute a serious challenge and threat to the traditional finance. In the process of reflection to the traditional financial theory, behavioral finance theory is well concerned because of its good explaination on the market's abnormal phenomenon. Real estate market players may cause market distortions because of their various difference in cognition and emotion.This reflects in limited rationality in real estate market. This makes it possible that we introduce Behavioral finance into the real estate market .Behavioral finance merges psychology especially behavioral science theories with finance. It starts from the characteristics both in the market players'mind and behaviors to study some phenomenons and problems in the financial market. This article mainly discusses the real estate market anomalies by using the theory of behavioral finance and studying of market players'mind and behaviors.Firstly, the efficient market hypothesis theory of traditional financial theory are reviewed in this paper, and based on it ,Ⅰdescribe the challenges and problems of the efficient market hypothesis.It builds a reasonable reference point for the description of the main's non-rational behaviors in the real estate market by analysing the efficient market hypothesis.Second, the paper introduces the process of behavioral finance, psychology basis, and its main theories, models and strategies. Based on behavioral finance research, we've got a better understanding in the behavior of the market bias and the resulting non-rational behavior.It finds a reasonable theory basis to explain the real estate market anomalies .Once again ,we focus on describing some of the list among the real estate market anomalies ,such as turnover, P / E ratio, housing vacancy rate and so on. the high ratio of housing vacancy rate ,noise trading and herding are obvious.Through the analysis of these indicators, we have concluded that the excessive speculation exists in the real estate market, and noise trading and herding makes this speculation over further expansion. Expected price are supposed to be the main reason for the price fluctuations through the inspection of the empirical price regression model. Then we've obtained that the noise trading, herding and feedback mechanisms of behavioral finance are the main reasons leading to such anomalies, and these abnormalities are more comprehensive analysed. Finally, based on the above analysis and discussion and integrated the real estate market anomalies,Ⅰput forward some of the main policy recommendations to regulate and improve the market and the behavior of the real estate market including the Government's proposal, the proposal for investors and recommendations on the real estate market managers, whose main purpose is to stabilize investors'expectation and norm investors'behavior.